OrganizationalChangeforSustainability

TataL.RaghuRam
XLRIJamshedpur
 Strategyoriginateswithinthe
organization
Ifyourtaskistoimprovesustainability
performanceofyourcompany,wherewouldyou
start?
Technologicaldevelopment?
Innovation?
Riskminimization?
Wasterecovery?
Analyzerewardsystems?
Structuralresponsibilities/organizationalculture
analysis?
Sustainabilityconcernshavereachedthestrategic
levelforcorporations
opportunitiesforsustainabilitystrategieswillnot
materializeunlessorganizationsarestructured to
identifythem.
Sustainabilitystrategyisnottechnologicalor
economicissue
Itisthecultureoftheorganizationthatguides
thedevelopmentofthatactivity
Sustainabilitystrategyisembeddedwithinthe
behavioralandculturalaspectsofthefirm
Socioenvironmentalmanagementto
SustainabilityStrategy
Requiresaconcurrentandsupportingshiftin
Organizationalculture
Structure
Rewardsystem
Jobresponsibilities
Managersmustfocusondevelopingan
organizationalculturethatencourages:
Mergerofsocial,environmental&economicinterests
 Organizationalgoals
Effectiveorganizationalstrategymustfocus
ondiffusingsustainabilityresponsibilities
throughouttheorganization
Notdirectedbyexternalsocietalinterests,but
Internalstrategicinterests
Sustainabilitystrategyisacompositeofcore
organizationalfunctions
SustainabilitystrategyasacompositeofInternal
FunctionalResponsibilities

GovtAffairs
Accounting
Strategicplanning
EHS
Finance
EnvironmentalProtection Operations
Engineering
R&D
Legalcounsel
Publicrelations
HR
 Overthelongterm,externalpressureswill
becomemorediverse/moredemanding
Numberoffunctionalsliceswillincrease
Proportionofsustainabilityconcernsfalling
totheEH&Sdepartmentwilldiminish
Sustainabilitywilldiffusethroughout
organization
Affectsthecultureofeverydepartment
Lessrelianceononedepartment more
relianceonanambiencethatintegratesthe
skillsofalloperating&supportdepartments
Environmentaldepartmentswillfunctionmore
asinternalchangeagents
Interpretchangesinsustainabilityregulations&
demands
Setinternaldirection&response
Facilitatechangeandintegration
Measureperformance
Communicateinternally&externally
Workwillfalltothediffusedmanagement
staffinpursuitofinternallydefined
sustainabilitygoals
 Thisbroadlyfollowsthehistoricaltrajectory
ofenvironmentalmanagement
Endofpipetreatment
Wasteminimization
Pollutionprevention
Productstewardship
Progressiveshiftindepartmentalknowledge
baseawayfromenv.mgmt.&towards
engineeringmgmt.&productdesign
 Sustainabilityshoulddisappearintothe
culturalfoundationofthecorporation
Profit
Quality
Sustainabilityconcernsbecomeingrainedin
everydaypractices
Disappearfromconsciousawareness
Becomepartoftheunconscious/subconcious
Mostdifficultchallenge mindset
Establishnewnorms&values
 OrganizationalRealities
Separateenvironmentaldepartments
Detachedfromcoredepartments
Ensurethatcorporationremainedcompliant
Operatingcoreremainedfocusedonprofit
maximizationbufferedfromexternalpressures
Mutuallybeneficialopportunitiesto
environment&bottomlinewereexcluded
becauseofstructuralarrangements
 Structurallimitationscreatecommunication
breakdowns
CapitalexpenditureVs.operatingexpenses
Sustainabilitycostsarealiabilityandnotanasseton
balancesheets
Costsarebilledtocorporateoverheadsandnot
tothedepartments
Businessmetrics ROI,earningspershare
Sustainabilitymanagersfailtoprovidesuch
economiccostbenefitanalysis
EMlexicon BOD,COD,LCA,EIA,SIA,EMP
 Organizationalchangemanagement
Changeprocessgoesthroughaseriesof
phases takestime
Omittingstepscreatesillusionofspeed,but
dontproducesatisfactoryresult
Acriticalmistakeinanyphasecanhave
devastatingimpact slowdownmomentum
&negateanyhardwongains
JohnKottler
 Phase1 Step1
Diagnosis EstablishaSenseofUrgency
Step2
FormapowerfulGuidingCoalition

Phase2 Step3
Unfreezing CreateaVision
RoadMapfor
Step4
Communicatethevision Organizational
change
Step5
Empowerotherstoact
Phase3
Step6
Movement Planforandcreateshorttermwins

Step7
Consolidateimprovements&producestillmorechange
Phase4 Step8
Refreezing Institutionalizenewapproaches
 Phase1:Diagnosis
Realizingthatchangeisnecessary
Whatstrategicactionstotakeinresponseto
criticalexternalsignals
Boundaryspanningthroughcollaboration
Businessbusiness
Business government
Business Community NGOs
Remainconnectedtovitalsourcesof
information
Externalsignalsofchange
Analyzeavailableoptionsfororganizationalchange
mgmt..
 Analyze:
Purpose
Structure
Internalrelations
Rewardstructure
Leadershipsystem
Specificneeds&proficiencies
Phaseofreflection challengeisin
interpretingexternalsignals&tailoringa
strategicresponse
 Sustainabilitymanagersarelinchpins
connecting3criticalforcesfororganizational
change&performance
Topleadership(whatarewetryingtobecome?)
Workforceenergy&productivity(howtoclimb
themountain)
Marketplacereality(whatdocustomerstruly
seek&whatwillourcompetitorsreallydo?)
 Phase2:Unfreezing
Onceastrategyisdeveloped unfreezing
preparestheorganizationforchange
Encounterresistance
Decreaseresistance
Gainbuyinfromorganization
3steps
1. Senseofurgency
2. Formapowerfulguidingcoalition
3. Createavision
SenseofUrgency:
Nochangeprocesswillsucceediforganization
donotunderstandwhythechangeisneeded
Crisis
Organizationaljolt
Successfulmanagersinitiatechangebyanalyzing
Competitivesituation,marketposition
Technologytrends
Financialperformance
Internalaudits astrongtool
Customersatisfactionsurveysetc..
Formapowerfulguidingcoalition
Startswith1or2coreproponents
Broadenthebasetoincludepowerstobe,
crosssectional powerfulvoices
Luretopbrasstoendorsechange
Evolveopencommunicationchannels
Fosterasolidsenseofcommonidentity&
purpose
CreateaVision
Evenifeveryoneacceptstheneedforchange;
Itisimportantthattheyunderstandthegoalsof
changeandtheirrole
Easytocommunicatevision
Visibletitle(Environmentalleadershipprogram,
PollutionPreventionPays,3Rs)
Ifucantcommunicateitin5minutes,youarenot
ready
Asetofgoals,methods,plans,directives&
timetable
 Phase3:Movement
Implementationphase
Communicatethevision
Cantcommunicate cantimplement
Buyinsupportthroughallpossiblemeans
Newsletters/meetings/speeches/training/plant
officesignage
ManagersPracticewhattheypreach
Createshorttermwins
Visiblesuccessbuildsmomentum
Encourageparticipatingmembers
Coaxnoncommittaltojoinefforts
 Consolidateimprovements&producestill
morechange
Donotdeclarevictorytoosoon
Donotrelaxaftershorttermwins
Complacencykillsmomentum
 Phase4:Refreezing
Institutionalizethechanges
Communicatehowthechangeshavehelped
Createarewardstructurethatrecognizes
sustainabilitystewardship
Set&communicaterewardcriteria configure
organizationalstructures
Watchoutfor:resistancetochange/resource
limitations/communicationsbreakdown/fearofthe
unknown/threatstoestablishedpowerbases
ORGANIZATIONALCHANGEISACRITICALCOMPONENTOF
EFFECTIVEENVIRONMENTALSTRATEGY